Wed, Dec 29, 1999 page4

• Cable TV operators cry foul over maximum rate limits

  • By Stephanie Low / STAFF REPORTER
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  A group of cable television operators yesterday challenged the subscription rate standards set by various local governments for the year 2000, arguing the standards are far too low to cover the expenses of running a licensed cable system.

  Against a maximum rate of NT$600 per subscriber per month set by the Government Information Office (GIO), local governments have recently announced their own standards according to which cable TV operators are permitted to charge their subscribers in 2000.

  While Kaohsiung City has set NT$480 as the maximum rate, the lowest of all, 10 other localities have also set rates below NT$600, ranging from NT$500 to NT$580. Only 10 localities maintain NT$600 as their maximum.

  Yang Teng-kuei (楊登魁), chairman of the Association for Cable Broadcasting Development (中華民國有線傳播發展協進會), said practices by the local governments are threatening the development of the cable TV industry, which has striven to upgrade facilities and programming quality to meet the strict requirements for business licenses.

  "This is like driving us back to the old path [of disregarding quality]," Yang said.

  Yang said the rates should not be further cut when the payments charged by channel agents are hiked every year.

  Low subscription rates used to be a tool used by some cable operators to attract subscribers in the past, when the cable TV industry was not fully under legal control. They were able to do so because they simply pirated lines already in use.

  "Of the 1,000-plus cable operators that existed during the peak period, 80 percent were pirates," Yang said.

  While operators only needed NT$50,000 to launch a system in the past, the cost is at least NT$200 million today, Yang pointed out.

  The GIO has tried to impose better management on the industry in recent years and has set strict requirements for them to obtain business licenses. Only 86 applications have been approved, with 22 having obtained their licenses and 64 others expected to get their licenses by July 2000.

  Han Shu-yuan (韓淑媛), a manager from the Nan-Kuo Cable Television Co (南國有限電視公司) in Kaohsiung County, said as her company covers a broad region with a widely dispersed popula-tion, the costs of maintenance of facilities and the laying of cables is relatively higher than in other regions.

  While the cost per subscriber is NT$550 for her company, the county government has set a NT$500 ceiling on prices, Han said.

  "Under these circumstances, the company will lose NT$1.5 million on a monthly basis and will inevitably close," Han said.

  David Liu (劉篤行), chairman of Filmate International Incorporation (木喬傳播事業股份有限公司), said based on the quantity and quality of the programs provided by cable TV operators, the subscription fee of NT$600 is still too low.

  "The subscription rate in Taiwan is the cheapest in all of Asia," Liu said.

  Chang Chung-jen (張崇仁), director of the GIO's Department of Radio and Television Affairs, said the GIO has already discovered possible flaws involved in setting uniform standards at the local level.

  Chang said that based on the Cable Television Law passed in February, local governments are empowered to screen the subscription fees reported by cable operators.

  Local governments are required to evaluate factors such as the cost and local management conditions to decide whether to set rate limits below NT$600, Chang added.

  Chang said when the GIO set the NT$600 ceiling two years ago, the cost involving the upgrading of their facilities was not covered, and licensed cable operators can in fact charge more than NT$600 with special approval from local governments.
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